Goldman Sachs: Central bank gold purchases far exceed previous estimates
2026-05-20 16:55:06
Goldman Sachs has discovered a systematic bias in its central bank gold demand calculation model, with errors spanning nearly eight months. The magnitude of this data correction far exceeds most investors' expectations. The bank maintains its year-end gold price target but explicitly warns of short-term downside risks: even with continued gold hoarding by sovereign central banks, gold prices may still face a sell-off.
Goldman Sachs' previous calculations of central bank gold purchases were significantly flawed, with the actual amount exceeding estimates by more than 70%. This model data correction will profoundly impact gold price trends in the second half of 2026. Goldman Sachs analysts Lena Thomas and Dan Streaven released a research report on May 18th detailing the data error while maintaining their year-end 2026 gold price target of $5,400 per ounce.
Gold data revision: overturns Goldman Sachs' original calculation logic for central bank gold purchases.
According to data from a UK currency information platform, Goldman Sachs has raised its estimate of the central bank's monthly gold purchases in March 2026 from approximately 29 tons to 50 tons, an increase of over 72%.
This upward revision of the data did not stem from new gold purchases, but rather from an institution's investigation that revealed structural statistical loopholes in the data source.
Goldman Sachs confirmed that since August 2025, UK trade statistics have failed to fully account for the amount of gold flowing out of London vaults, which has led the bank's models to consistently underestimate the actual gold purchases of sovereign central banks over the past eight months.
The analyst stated in the research report: "We updated the central bank's real-time gold purchase calculation data because since August 2025, the original calculation results have been significantly lower than the actual level for a long period of time."
Goldman Sachs currently estimates that central bank gold purchases will be approximately 80 tons in April 2026, and predicts that the average monthly gold purchases by central banks in 2026 will be 60 tons, with a total annual gold purchase of approximately 720 tons.
Central bank gold purchases: the core driver of gold price trends
Central bank gold purchases differ fundamentally from those of ordinary investors and speculative funds. Sovereign central banks invest in gold with a long-term perspective, are extremely insensitive to short-term gold price fluctuations, and do not sell off their gold reserves based on quarterly earnings performance.
Goldman Sachs' upward revision of its gold purchase forecast is not simply an adjustment of prediction data, but rather confirmation that over the past year, there has been a massive and highly motivated gold-buying force in the market that had not been accurately measured previously.
Independent statistics from the World Gold Council show that central banks around the world purchased a total of 244 tons of gold in the first quarter of 2026, which is basically consistent with Goldman Sachs' annualized estimate of 720 tons for the whole year.
According to statistics from financial information platforms, the People's Bank of China (PBOC) increased its gold holdings by 8 tons in April 2026, marking a new monthly increase since December 2024; as of January 2026, the PBOC has increased its gold holdings for 15 consecutive months.
Goldman Sachs points out that emerging market central banks' gold reserve allocation is still relatively low compared to developed economies. The trend of diversifying reserve assets to de-dollarize is solid, and they will continue to increase their gold reserves in the future, unaffected by short-term gold price fluctuations.
The underlying logic is clear: in order to reduce dependence on dollar assets and hedge against geopolitical risks, countries will never frequently buy and sell gold in the short term to adjust their reserve structure.
The target price of $5,400 remains unchanged, but short-term negative risks are becoming more apparent.
In the week ending May 15, international gold prices fell 3.7%, with spot gold dropping to around $4,540 per ounce.
Even with a pullback in gold prices, Goldman Sachs remains committed to its year-end target price of $5,400, but acknowledges significant downward pressure on gold prices in the short term.
Analysts said, "If tensions in the Strait of Hormuz continue, coupled with further corrections in bonds and stocks, gold may face even greater selling pressure, and the downside risk for gold prices is relatively high in the short term."
Further analysis by institutions: Once the stock market experiences a sharp decline due to rising expectations of interest rate hikes and weakening economic growth expectations, ordinary investors facing liquidity gaps will prioritize selling gold to replenish margin and adjust their asset portfolios. This is the core reason why the central bank continues to hoard gold, yet gold prices continue to fall.
However, data shows that during the period of sharp decline in gold prices, gold ETFs saw a net inflow of 240,000 ounces in the week ending May 15, indicating that many investors did not follow the trend of selling off; but if liquidity in the financial market tightens further, this supporting force will quickly fade.
Medium- to long-term trend: Gold prices have the upper hand in terms of upside potential.
Putting aside short-term negative factors, Goldman Sachs is optimistic about the medium- to long-term trend of gold.
Institutional benchmark forecasts: The Federal Reserve will cut interest rates by a total of 50 basis points in 2026, and private funds will no longer sell gold on a large scale; the interest rate cuts alone will drive inflows into gold ETFs, pushing gold prices up by about $120 per ounce.
In addition, geopolitical tensions will bring asymmetric upward benefits to gold prices: escalating tensions in Iran, the unfolding geopolitical events in Greenland and Venezuela, and intensified Sino-US rivalry will all accelerate the process of countries around the world selling off dollar assets and increasing their gold holdings. At the same time, market concerns about the fiscal stability of Europe and the United States will continue to rise.
Goldman Sachs refuted market concerns that Gulf states might sell gold to stabilize their currencies, pointing out that these countries would prioritize selling US Treasury bonds over gold for stability. This move, in turn, would further solidify gold's status as a core global reserve asset, which is beneficial for gold prices in the long run.
Summary of key data from Goldman Sachs research reports
The People's Bank of China's (PBOC) gold purchase estimate for March has been revised from 29 tons to 50 tons, an increase of over 72%.
Estimated gold purchases in April: 80 tons; average monthly purchases in 2026: 60 tons, totaling 720 tons for the year.
World Gold Council: Central Bank Gold Purchases in Q1: 244 Tons
The People's Bank of China purchased 8 tons of gold in April, marking the 15th consecutive month of increasing its gold reserves.
Goldman Sachs' year-end gold price target for 2026: $5,400/oz; spot gold price on May 15th was approximately $4,540/oz.
A 50-basis-point rate cut by the Federal Reserve could drive gold prices up by approximately $120 per ounce.
During the period of sharp decline in gold prices, gold ETFs saw a net inflow of 240,000 ounces in a single week.
Practical Insights for Gold Investors in 2026
The core value of this research report is not the previously announced target price of $5,400, but the significant data revision.
As it turns out, central banks around the world have actually stockpiled gold over the past eight months, far exceeding market expectations. The central bank's gold-buying behavior itself hasn't changed; the problem lies in the previous statistical data. This also means that the support level for gold prices during the correction phase after breaking through $5,600 in January was far more solid than most investors anticipated.
For gold investment in the second half of 2026, three key market trends should be closely monitored:
Short-term negative factor: The deteriorating situation in the Strait of Hormuz triggered a concentrated sell-off of gold by private investors, putting downward pressure on gold prices;
Medium-term support: The central bank's monthly purchase of 60 tons of gold to meet its basic needs has solidified the price floor regardless of gold price fluctuations;
Long-term upside potential: With the ongoing global de-dollarization and normalization of geopolitical conflicts, countries are accelerating the transformation of their reserve assets, giving gold prices a strong potential for asymmetric price increases, and there are no signs of this trend reversing in the near future.
Goldman Sachs' previous calculations of central bank gold purchases were significantly flawed, with the actual amount exceeding estimates by more than 70%. This model data correction will profoundly impact gold price trends in the second half of 2026. Goldman Sachs analysts Lena Thomas and Dan Streaven released a research report on May 18th detailing the data error while maintaining their year-end 2026 gold price target of $5,400 per ounce.
Gold data revision: overturns Goldman Sachs' original calculation logic for central bank gold purchases.
According to data from a UK currency information platform, Goldman Sachs has raised its estimate of the central bank's monthly gold purchases in March 2026 from approximately 29 tons to 50 tons, an increase of over 72%.
This upward revision of the data did not stem from new gold purchases, but rather from an institution's investigation that revealed structural statistical loopholes in the data source.
Goldman Sachs confirmed that since August 2025, UK trade statistics have failed to fully account for the amount of gold flowing out of London vaults, which has led the bank's models to consistently underestimate the actual gold purchases of sovereign central banks over the past eight months.
The analyst stated in the research report: "We updated the central bank's real-time gold purchase calculation data because since August 2025, the original calculation results have been significantly lower than the actual level for a long period of time."
Goldman Sachs currently estimates that central bank gold purchases will be approximately 80 tons in April 2026, and predicts that the average monthly gold purchases by central banks in 2026 will be 60 tons, with a total annual gold purchase of approximately 720 tons.
Central bank gold purchases: the core driver of gold price trends
Central bank gold purchases differ fundamentally from those of ordinary investors and speculative funds. Sovereign central banks invest in gold with a long-term perspective, are extremely insensitive to short-term gold price fluctuations, and do not sell off their gold reserves based on quarterly earnings performance.
Goldman Sachs' upward revision of its gold purchase forecast is not simply an adjustment of prediction data, but rather confirmation that over the past year, there has been a massive and highly motivated gold-buying force in the market that had not been accurately measured previously.
Independent statistics from the World Gold Council show that central banks around the world purchased a total of 244 tons of gold in the first quarter of 2026, which is basically consistent with Goldman Sachs' annualized estimate of 720 tons for the whole year.
According to statistics from financial information platforms, the People's Bank of China (PBOC) increased its gold holdings by 8 tons in April 2026, marking a new monthly increase since December 2024; as of January 2026, the PBOC has increased its gold holdings for 15 consecutive months.
Goldman Sachs points out that emerging market central banks' gold reserve allocation is still relatively low compared to developed economies. The trend of diversifying reserve assets to de-dollarize is solid, and they will continue to increase their gold reserves in the future, unaffected by short-term gold price fluctuations.
The underlying logic is clear: in order to reduce dependence on dollar assets and hedge against geopolitical risks, countries will never frequently buy and sell gold in the short term to adjust their reserve structure.
The target price of $5,400 remains unchanged, but short-term negative risks are becoming more apparent.
In the week ending May 15, international gold prices fell 3.7%, with spot gold dropping to around $4,540 per ounce.
Even with a pullback in gold prices, Goldman Sachs remains committed to its year-end target price of $5,400, but acknowledges significant downward pressure on gold prices in the short term.
Analysts said, "If tensions in the Strait of Hormuz continue, coupled with further corrections in bonds and stocks, gold may face even greater selling pressure, and the downside risk for gold prices is relatively high in the short term."
Further analysis by institutions: Once the stock market experiences a sharp decline due to rising expectations of interest rate hikes and weakening economic growth expectations, ordinary investors facing liquidity gaps will prioritize selling gold to replenish margin and adjust their asset portfolios. This is the core reason why the central bank continues to hoard gold, yet gold prices continue to fall.
However, data shows that during the period of sharp decline in gold prices, gold ETFs saw a net inflow of 240,000 ounces in the week ending May 15, indicating that many investors did not follow the trend of selling off; but if liquidity in the financial market tightens further, this supporting force will quickly fade.
Medium- to long-term trend: Gold prices have the upper hand in terms of upside potential.
Putting aside short-term negative factors, Goldman Sachs is optimistic about the medium- to long-term trend of gold.
Institutional benchmark forecasts: The Federal Reserve will cut interest rates by a total of 50 basis points in 2026, and private funds will no longer sell gold on a large scale; the interest rate cuts alone will drive inflows into gold ETFs, pushing gold prices up by about $120 per ounce.
In addition, geopolitical tensions will bring asymmetric upward benefits to gold prices: escalating tensions in Iran, the unfolding geopolitical events in Greenland and Venezuela, and intensified Sino-US rivalry will all accelerate the process of countries around the world selling off dollar assets and increasing their gold holdings. At the same time, market concerns about the fiscal stability of Europe and the United States will continue to rise.
Goldman Sachs refuted market concerns that Gulf states might sell gold to stabilize their currencies, pointing out that these countries would prioritize selling US Treasury bonds over gold for stability. This move, in turn, would further solidify gold's status as a core global reserve asset, which is beneficial for gold prices in the long run.
Summary of key data from Goldman Sachs research reports
The People's Bank of China's (PBOC) gold purchase estimate for March has been revised from 29 tons to 50 tons, an increase of over 72%.
Estimated gold purchases in April: 80 tons; average monthly purchases in 2026: 60 tons, totaling 720 tons for the year.
World Gold Council: Central Bank Gold Purchases in Q1: 244 Tons
The People's Bank of China purchased 8 tons of gold in April, marking the 15th consecutive month of increasing its gold reserves.
Goldman Sachs' year-end gold price target for 2026: $5,400/oz; spot gold price on May 15th was approximately $4,540/oz.
A 50-basis-point rate cut by the Federal Reserve could drive gold prices up by approximately $120 per ounce.
During the period of sharp decline in gold prices, gold ETFs saw a net inflow of 240,000 ounces in a single week.
Practical Insights for Gold Investors in 2026
The core value of this research report is not the previously announced target price of $5,400, but the significant data revision.
As it turns out, central banks around the world have actually stockpiled gold over the past eight months, far exceeding market expectations. The central bank's gold-buying behavior itself hasn't changed; the problem lies in the previous statistical data. This also means that the support level for gold prices during the correction phase after breaking through $5,600 in January was far more solid than most investors anticipated.
For gold investment in the second half of 2026, three key market trends should be closely monitored:
Short-term negative factor: The deteriorating situation in the Strait of Hormuz triggered a concentrated sell-off of gold by private investors, putting downward pressure on gold prices;
Medium-term support: The central bank's monthly purchase of 60 tons of gold to meet its basic needs has solidified the price floor regardless of gold price fluctuations;
Long-term upside potential: With the ongoing global de-dollarization and normalization of geopolitical conflicts, countries are accelerating the transformation of their reserve assets, giving gold prices a strong potential for asymmetric price increases, and there are no signs of this trend reversing in the near future.
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